Mumbai: China's Alibaba became the biggest shareholder in India's leading online grocer BigBasket, founded by a Keralite, after a $300-million funding round, stepping up its rivalry with Amazon in the country.
Alibaba invested $146 million in the grocer, subscribing to compulsorily convertible preference shares, BigBasket said in a filing to Indian regulators.
Investors picked up stakes in BigBasket through secondary share purchases as well, chief executive Hari Menon told Reuters on Friday, declining to give a breakdown other than to say Alibaba now owns the biggest slice.
Sands Capital, International Finance Corp and Abraaj Capital also participated in the $300 million funding round.
BigBasket, which sells everything from vegetables to shampoo, will use the funds to improve its technology, analytics, infrastructure and marketing, Menon said.
The Bengaluru-headquartered firm, which also plans to build farmer networks and expand deeper into Indian cities where they operate, expects to break even between 2020 and 2022, Menon added.
BigBasket is planning to sign a deal with Paytm E-Commerce that runs online marketplace, Paytm Mall, allowing both firms to leverage each others strengths, Menon said.
Under the deal, which will become effective in the first half of this year, Paytm will become the default payments provider to BigBasket while BigBasket will be able to cross-sell groceries on Paytm Mall, Menon said.
Alibaba holds various investments in India's fast-growing online retail space, including a stake in the parent of top digital wallet firm Paytm.
BigBasket, which researcher Forrester estimates accounts for roughly 40 percent of India's $750 million online grocery market, is competing with SoftBank-backed Grofers and Amazon's India business.
Founded in 2011, BigBasket has more than 6 million registered customers and operates across 26 Indian cities.